The Republicans in Congress are in a strange situation with Trump.  It’s like being married to say an embarrassing drunk… you’re constantly afraid of the next stupid thing to come out of their mouth, you don’t want to be seen with them, and they make you look bad at work functions.  You want to get a divorce, but you have to stay with them for the kids.  Last week, I was very concerned that Trump was going to take any legislative stimulus and possibly the economy down with him, because he would become someone no one wanted anything to do with.  The Bannon firing changed my perspective, and I think this could be much more significant than people realize.  This all assumes that it’s not too late to save the marriage – that an irreparable rift hasn’t developed with Trump.

  • Trump has more lives than a cat. I just don’t see how some guy in POLITICS has survived: “grab ‘em by the p*ssy,” firing Comey for not being loyal, Russia obstruction of justice, and sharing classified intelligence with an “enemy.”  And I’m not even including things like anti-Mexico rants, pulling out of the Climate Accord, shoving Montenegro, Yad Vashem, the tax plan for the rich, and a Russia grand jury.  And it’s only been a little over 6 months!  Nothing sticks to this guy!  So I think he could get away from this recent neo-Nazi episode.
  • At first, I just thought the Bannon firing was a “scapegoat” move. “It wasn’t Trump – it was his neo-Nazi advisor.”  Yes – nothing will change the fact that Trump is an idiot.  But considering Trump had nothing outwardly bad to say about Bannon (not fingered as a scapegoat), I think part of the rationale was that this was kind of olive branch to some of the Republicans in Congress who hated working with Bannon.  And Trump may be starting to understand the importance of optics.
  • There is definitely an “addition by subtraction.” I feel pretty good about Kelly, Cohn, Mnuchin, and the rest of Trump’s inner circle now.  With Bannon and Scaramuccci gone, there seems to be a more “professional” atmosphere.  Without all the internal squabbling, I think Trump could finally be getting more coherent and unified advice.

That’s why I think some legislation could get done.  He has better people around him, people seem to be willing to forgive/forget his stupidity (especially with the Bannon firing), and the most important factor is… there are elections next year.  If you can’t get a tax cut package passed controlling both houses of Congress and the Presidency GOING INTO AN ELECTION YEAR, after promising this for the past year, you are going to get killed in the elections.  Period.

Assuming Trump escapes being permanently toxic, it is in everyone’s best interest to get something done.  I’m not saying it has to be done right away… having refund checks arrive a month or two before the elections (for maximum effect, eh hem) gives Republicans plenty of time to work out the details.  If there’s one thing you can ALWAYS count on, it’s politicians taking care of their own best interests.

 

So perhaps we should take a new look at the Fed meeting pricings…